Forestry and Wood Supply
| In 2007, the ECO undertook an extensive analysis of the environmental implications of various land use policies and allocation decisions in Ontario’s northern boreal landscape. The following articles are included: | |
While the government is moving to open up the intact northern boreal forest to logging, some wood supply that already exists for commercial forestry in the AOU is not currently being utilized. Ontario’s forest industry is in a state of massive change, caused by a number of economic factors, including a strong Canadian dollar, increasing energy costs, slumping prices for lumber, declining demand for newsprint, cheap foreign competition, and U.S. export barriers. As a result, companies are restructuring and taking drastic measures to remain competitive.
It is expected that this period of restructuring will result in fewer, larger companies operating fewer, but more efficient, mills. A large number of mills have already been closed in the province. The mill closures have caused significant job losses, declining populations in northern towns and significant impacts on the municipal tax base.
The provincial government has been under pressure to assist the forest industry, its workers, and northern communities in surviving this crisis. Since 2005, the province has responded with over $1 billion in new programs for the forest industry over five years, as well as making changes to a number of existing government policies and programs. The initiatives include loans and grants to stimulate investment, electricity and stumpage fee rebates, streamlining and speeding up approval processes, and an Ontario Wood Promotion Program to enhance value-added manufacturing. Some of these initiatives are very positive, particularly those that improve forest inventories and those that encourage value-added manufacturing.
For many years, the government has been advised to help diversify northern economic development by ensuring that more harvested wood is manufactured into products in Ontario. Unlike dimensional lumber, value-added wood products are not subject to U.S. duties and could increase revenues and jobs. However, some of the government’s other recent initiatives may be ill-conceived, and result in unintended environmental and social consequences.
The ministry has launched “competitive” processes to re-allocate wood that has been freed up by mill closures. This is an unprecedented situation with significant volumes of Crown timber likely to be re-allocated in the near future. The ministry’s decisions about wood allocation and licensing have high potential to impact the long-term health of Crown forests, as well as the economic and social well-being of northern communities. In 2007, MNR turned down an EBR application requesting a review of the ministry’s wood allocation policies and procedures. This application is reviewed in detail in 2007 Review of Allocation of Crown Timber in the Supplement to this Annual Report.
The ECO disagrees with MNR’s position that wood allocation and licensing decisions are not environmentally significant. The 2004 Provincial Wood Supply Strategy gives considerable weight to industrial demand at the expense of environmental factors. This strategy described an impending shortage of wood for the commercial forest industry. The present situation in the industry offers the potential to avert the wood supply gap. Mill demand is now decreasing due to massive changes in the industry, yet MNR is rushing to create new demand, re-allocating wood instead of reconciling the relationship between allowable harvest in forest management plans and mill capacity.
The closure of mills presents problems, but provides opportunities as well. Once the wood allocations from those mills revert back to the Crown, the ministry has an opportunity to step back and assess the forest, set new sustainable wood supply objectives – independent of historical mill demand – and consider the best use of its natural capital.
The ECO notes that MNR’s primary responsibility under both the Crown Forest Sustainability Act and the EBR is to ensure the sustainability of Ontario’s forests. MNR has an opportunity now to re-balance wood supply and demand, to consider increasing non-timber forest products, and to promote ecotourism, recreational hunting and fishing, and the protection of threatened species. The ministry should also consider the interests of the communities on the landscape, especially in light of the severe economic impacts they are experiencing. MNR has the capacity to make major decisions now that could result in a dramatically different future forest.
MNR also must make its policies, procedures and decisions more transparent. Northern communities and other stakeholders have been asking for more transparency in ministry allocation decisions. They feel that the ministry is allowing large forestry companies to buy mills, close them and send the wood supply to their mills in other communities or even out of province. These are legitimate concerns, and illustrate the significant social, economic and environmental impacts of MNR’s licensing and allocation decisions. The ECO urges MNR to review its policies regarding wood allocation, and to provide more opportunities for public comment on both the policies and ministry decisions about allocations.
| This is an article from the 2006/07 Annual Report to the Legislature from the Environmental Commissioner of Ontario. |
Citing This Article:
Environmental Commissioner of Ontario. 2007. "Developing Priorities: The Challenge of Creating a Sustainable Planning System in Northern Ontario." Reconciling our Priorities, ECO Annual Report, 2006-07. Toronto, ON : Environmental Commissioner of Ontario. 61-63.
